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Michael Burry Says Markets Could Peak Within 9 Months - Here’s What Tech Investors Should Know

SMH climbed 67% in 2026 while his options expire before July 2027

By Damilola Esebame, CFEI® , Edited by Laura Hohenstein

Updated Oct. 16, 2026

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Michael Burry wrote on his Substack that he believes markets are 'within 0-9 months of a significant top' and moved nearly all short exposure into Nasdaq-100 puts expiring April 2027 and VanEck Semiconductor exchange-traded fund (NASDAQ: SMH) puts expiring June 2027.

SMH gained more than 67% in 2026, while the Magnificent Seven held roughly 34% of the S&P 500, and the choice to check up on your financial health by reviewing semiconductor exposure may carry urgency for index fund holders.

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The Nasdaq-100 and SMH puts replaced nearly every other bearish position

Burry described the positions as relatively inexpensive given low volatility and consistent with his investment timeline, with both sets of puts sitting roughly 20% out of the money at the time of the Substack post, Stocktwits outlined.

He kept longer-dated puts on Palantir Technologies (NASDAQ: PLTR) and Oracle (NYSE: ORCL) while closing his other bearish positions, 24/7 Wall St showed. Burry also sold Fannie Mae and Freddie Mac common stock for a full tax loss before buying preferred shares in several series.

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A potential top could arrive within zero to nine months as indexes reach new highs

The Substack post described the final stage of the bull market as volatile, with major indexes at new highs, Stocktwits reported. A slowdown in hyperscaler spending or weak chipmaker forecasts could pressure SMH, while sustained artificial intelligence (AI) investment could undermine the bearish thesis, Benzinga showed.

Burry, the hedge fund manager who predicted the 2008 financial crisis through his analysis of subprime mortgages, wrote, "At the moment, almost my entire short position is expressed through SMH and NDX puts," narrowing your monitoring of his views to two instruments, Stocktwits documented.

Nvidia held 19.6% of SMH, while the top three stocks carried 34.5% of the fund

Nvidia (NASDAQ: NVDA) represented 19.6% of SMH, Taiwan Semiconductor Manufacturing (NYSE: TSM) held 9.3%, and Advanced Micro Devices (NASDAQ: AMD) accounted for 5.6%, concentrating 34.5% of the fund in three names sensitive to AI infrastructure demand, Benzinga noted.

Broadcom (NASDAQ: AVGO), Micron Technology (NASDAQ: MU), Marvell Technology (NASDAQ: MRVL), and Applied Materials (NASDAQ: AMAT) each held roughly 5%, meaning half of SMH sat in fewer than ten positions, and your exposure could shift sharply on a handful of earnings reports, Stocktwits outlined.

SMH gained 67% in 2026 as chip stocks outpaced the broader market

SMH climbed more than 67% in 2026 as semiconductor stocks led the broader market, and the rally may have pushed your chip allocation beyond its intended portfolio weight, 24/7 Wall St reported.

Nvidia gained 20% in 2026, while Taiwan Semiconductor rose 43%, with the pair carrying a combined 28.9% of the fund.
AMD surged over 170% as the fund's top gainer despite holding 5.6% of SMH.
The iShares Semiconductor ETF (SOXX) returned 79% in 2026, outpacing SMH across a broader basket of chip stocks.

The Magnificent Seven drove more than half of S&P 500 gains from 2023 to 2025

The Magnificent Seven's collective weight in the S&P 500 climbed to roughly 34% as of early 2026, and the group drove more than half of the index's gains from 2023 to 2025, a concentration that grew by nine percentage points from roughly 25% during the 2022 drawdown.

The average Magnificent Seven stock sat roughly 20% below its high, and when that group represents a third of the index, a further decline could amplify the drawdown in your retirement portfolio beyond what a broad market label suggests, Future Standard reported.

The AI industry may need $4.2 trillion in new revenue to justify current spending

Reuters placed the AI industry's required new revenue at $4.2 trillion within five years to justify the current infrastructure buildout, a figure that could support the multiples Burry has bet against if realized but that leaves substantial room for shortfall, 24/7 Wall St showed.

Sustained AI investment and strong quarterly earnings could undermine the bearish thesis, and your decision on semiconductor exposure may depend on whether you believe the spending cycle extends long enough to justify current multiples before the put expirations arrive.

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Daily-reset inverse ETFs cannot replicate a long-dated put strategy

ProShares Short QQQ (PSQ) delivers daily inverse Nasdaq-100 returns and Direxion Daily Semiconductor Bear 3X (SOXS) targets triple the daily inverse of its semiconductor benchmark, but the daily-reset mechanism in both products makes them unsuitable as long-term substitutes for Burry's multi-month put strategy, Benzinga noted.

Copying an options trade without knowing the premium paid or its role in the broader portfolio adds a second bet on timing, and your response to the peak call might instead begin with reviewing overlapping technology holdings and keeping only those whose earnings justify their valuations.

Bottom line

Palantir roughly doubled since June 2026 and hit a record high, yet Burry held puts on the stock alongside Oracle, which fell 26.5% year to date, and when you start investing effort in reviewing your semiconductor tilt, the gap between those positions may clarify where risk concentrates.

Burry previously closed in December 2026 Nvidia puts, as time decay eroded their value, a reminder that timing the market through options costs money even when the directional thesis proves correct. The concentration within SMH makes the fund sensitive to demand shifts, and verifying your exposure may matter more than attempting to replicate a hedge fund position.

This article is for informational purposes only and should not be considered investment advice.

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